Asia

Garment factory fires

A "distinctly South Asian" tragedy

IT IS a grimly familiar story: crowded production lines, an electrical short-circuit, flammable chemicals, faulty fire extinguishers, stairways blocked by piles of clothes, exits barred, workers—mostly female—trapped, asphyxiated, burned, or forced to jump to their deaths. The hellish blaze in the Tazreen garment factory on 25th November shocked Bangladesh, but it did not surprise.

In the booming megalopolises of the emerging economies, such clothes factory fires are common. On one night in September, almost 300 people, including many children, were killed in two separate blazes in Karachi and Lahore.

After the Pakistani disaster, The Times of India described the wave of garment factory fires as a “distinctly South Asian” tragedy. There is some truth in this. The industry’s centre of gravity is moving south. Labour costs in China, once the preferred location for clothes production, are rising. This pushes low-skill manufacturing jobs into India, Pakistan, Cambodia, Vietnam and, in particular, Bangladesh, where clothes now make up 75% of exports. Indeed, most people reading this post will have one or more items made there in their closet. Compliance standards, says McKinsey, are generally improving, but remain very mixed. The Clean Clothes campaign estimates that over 700 Bangladeshis have perished in garment factory fires over the past decade.

The causes of the fires reflect the industrial circumstances. Productivity in these countries is low, squeezed Western consumers want inexpensive clothes, and factories—and entire economies—must therefore compete on price. “Fast fashion” chains such as Zara, the Gap and H&M specialise in rushing new styles from catwalks to retail outlets at pace. This necessitates bursts of production at crucial moments in the style cycle. Large orders are sub-contracted to multiple manufacturers: the chain of intermediaries leading from Main Street to the labourer can be long and opaque. Factory owners take on extra staff, leading to over-crowding. The pressure to fulfil orders is intense. Speed matters. Safety standards slip.

Such was the backdrop to the Tazreen fire, which killed 112. Like many, the factory was working flat-out to meet the Christmas rush in the West. Survivors claim that managers locked the doors to prevent workers from stealing stock as they fled. Wal-Mart, the American retail giant, had terminated its relationship with the factory due to safety concerns. But, it reports, one of its sub-contractors continued to use Tazreen without its consent: Wal-Mart clothes were still being produced there months after the firm had deemed the plant unsafe. Smouldering remains of the store’s “Faded Glory” range were found in the embers.

Whilst regretting the loss of life, Wal-Mart continues to blame the unnamed sub-contractor (believed to be Simco Bangladesh Ltd) whilst stressing that it monitors its supply chains closely. This is not entirely convincing. The McKinsey report on Bangladesh’s clothes industries, published in November 2011, notes (emphases added) that:

"The regional concentration of Bangladesh’s RMG [ready made garment] industry provides a relatively high visibility of the compliance situation. CSR [corporate social responsibility] stakeholders can visit a significant amount of suppliers within a relatively short time. This situation offers more opportunity to create transparency regarding supplier conduct than would be possible in countries such as China and India, as their industry locations are much more spread out. International buyers should also make active use of unannounced visits to achieve transparency."

November’s blaze occurred in Ashulia, the heart of the Bangladesh’s manufacturing industry. And it was not a one-off. In 2010 a fire at another Ashulia factory used by Wal-Mart killed 27. The risks of inadequately monitored sub-contractors are well-documented. Wal-Mart is the world’s largest retailer—surely it can do better?

Others do. American Apparel says it “minimises” its use of sub-contractors. Nike, once known for washing its hands of abuses in its supply chain, is now a model of good practice: it has created an interactive online map listing every one of its production sites. Apple has recently commissioned the Fair Labour Association to produce a full audit of where its gizmos and components are made. Tchibo and PVH, the owners of Calvin Klein and Tommy Hilfiger brands, are parties to the Bangladesh Fire and Building Safety Agreement. This commits them to work with owners, unions and the authorities to operate a strict regime of mandatory inspections, information sharing and factory upgrades. Despite a public petition calling on it to do so, Wal-Mart, along with H&M and the Gap, is yet to sign.

Today, a culture of impunity persists. “The owners go unpunished and so they don’t care about installing enough security facilities,” says Tahmina Rahman, general secretary of the Bangladesh Garment Workers Federation. Pressure from retailers can alter that: “things are changing and if I do not comply, I cannot get the orders”, said one factory boss in an interview with McKinsey. But only when retailers get a tight grip on their supply chains can they exert this pressure. The “South Asian tragedy” is not over until they do.

Readers' comments

The Times of India was wrong to say this tragedy is "distinctly South Asian" and the Economist is wrong to repeat it. Garment factory fires have a history nearly as long as industrialization itself, going back through the 19th century garment districts of NYC and Manchester. Assuming South Asia eventually prospers to some degree, who among us cannot imagine this story being repeated in coming decades from Nigeria or Bolivia?

There is in fact nothing whatsoever linking South Asia or anything "distinctly South Asian" to garment factory fires. This is merely, and tragically, the temporary imbalance of power between market capitalism and as yet underdeveloped local social institutions which occurs anywhere and anytime globalized markets seek out pockets of cheap labor.

It has happened before and elsewhere, and it will happen again and elsewhere unless global capitalism or governance finds a way to stop it.

Instead of blaming South Asian owners for ignoring safety, why don't you start at home? Even luxury lines such as Sean John, who already charge a hefty premium for their products, are too greedy to offer a higher bottom line for production costs. These third-world garment manufacturers are a dime in a dozen because of their low-tech nature which is the reason why american entrepreneurs are squeezing them for every dollar possible.

Food for thought: If you don't know why these third-world manufacturers could produce stuff so cheaply, you probably never had the conscience to ask why.

Faulty fire extinguishers, stairways blocked with piles of clothes and exits barred to prevent thefts - none of these require much money. Its a general indifference to such hazards that are pretty commonplace in many places including South Asia. Using this as an excuse to beat up WalMart is forgetting there's a direct employer (the factory owner) and a direct Govt (Bangladesh, India, Pakistan whatever) responsible for enforcing its own safety rules to save lives.

Who are the South Asian Factory Workers? They are no one but the Indigo farmers of the colonial age. And the factory owners are just the local contacts to run and oversee the production. The Orders are placed with buying houses either in Hong Kong or Delhi or Singapore with offices in Bangladesh who places the order with the factories at the lowest possible cost to maximize already hefty profits of the corporate buyers. A recent study showed just increasing the C&M (Cutting & Manufacturing ) Cost by US$ 0.10/pc will ensure safety and protection of the workers. But the buyers are not prepared to part with that cost. Dont worry south asians are here to serve others and will keep on doing till their last days.

Tragedy like this will continue and retailers, companies and consumers will simply pay lip service to the safety and welfare of workers in developing countries.

As long as customers expect to pay the lowest possible price and companies are greedy to make maximum profit, businesses will try to cut corners somewhere and corner cutting will cost lives.

Safety, workers’ welfare, good working conditions, etc add extra costs. The question is whether customers are prepared to pay a little bit more for products.

For example, the Cambodian garment manufacturers association has recently asked Western buyers to help subsidise lunch at clothing factories in Cambodia because of the low nutrition levels of workers after a few fainted on the job. Not a single buyer has responded to the request!

It's not just a culture of Impunity, with the owners and their western contractors escaping prosecution. It's also about the "race to the botton line" ie keeping costs as low as possible, which inevitably means cuts in health & safety, as well as poor working conditions. This really is the logic of Globalisation, to enable the selling of "must haves" to western consumers at rudiculously low prices, in order to maximise profit margins. It may well be why International buyers do not make active use of unannounced visits to achieve transparency with regards to local Fire and Building Safety Agreements. It's a corporate version of "Don't Ask, Don't Tell".

This is not an issue of any region or country. Rather its related to the vary nature of the development of the industry. There must have two arms in the development of the industry : motivation for entrepreneurs, and safety for the employees. Both should be in cash & kind.

Walmart should Pay 1 Million Taka for each victim burned of Tazreen Garments

Why dont every one asking Wal-Mart to pay Taka 1 Million per head who died inside the Tazreen Garments . I am working with this textile and garments industry more than 18 years , also looks after the compliance issue to regularize a factory . And all buyer have a check list to monitor the sub-contractor . If Tazreen fashion worked as sub-contractor for a supplier . Why the compliance team of Wal-Mart compliance and ethical team didnt monitor it . That mean wal-mart ethical operation is not much functional . And its very sad that we have buried a 100+ human who were engaged to produce wal-mart brands .

Simple way to stop burning people at the alter of profit is to Hang the Mill Owner, The Corrupt Factory Inspector and A.N.Other. Make sure the Facory Health and Safety Regulation is implemented without fear or favour.

You cant talk like that , There is no buyer who is not herein Bangladesh . And you must know the business trend of Knit /Oven/ Hometex business growth .And also the GDP growth of BD . You are talking like the fundamental capitalist from USA / UK .

The philosophy which guides the selection and training of students in Economics in the desire to continuously produce graduates well armed to play positive roles towards the social and economic advancement of Nigeria, Africa and the world. This philosophy enables the graduates in the discipline to promote the well being and dignity of man in society. This philosophy is achieved by not only equipping the students with a broad foundation in the field of social sciences but also in grounding them in the application of economic theory and the tools of economic analysis in solving human problems.
The degree programme seeks to fulfil the following interrelated objectives: For more link up with http://unn.edu.ng/department/economics